AHIC: Mega Projects are here to stay

2 May 2007

Mega projects such as Bawadi, Yas Island and King Abdullah Economic City are set to become the global norm, as the defining parameters of urbanisation continue to change, claims M ark Amirault, Group Senior Director, Development, Emaar Properties, talking at the Arabian Hotel Investment Conference (AHIC) in Dubai.
“The world is already discussing mega cities - those with more than 10 million inhabitants. This radical growth of cities has made the concept of mega projects imperative. A mega project can be envisaged as a city within a city - a self-sustained environment with all amenities and supporting infrastructure. Such developments cover residences, commercial space, shopping malls, hospitality projects and entertainment outlets,” Amirault outlined.
According to a report by the United Nations, by 2030 over 60 per cent of the world’s population will live in cities.
However, mega projects such as those under development in the Middle East differ so widely; how can we define what makes a ‘mega project’ and what makes a normal urban environment? Amirault has the answer: “A mega project rises above any ordinary definition; a very tall building is not a mega project but the tallest building is. A mega project must be the best, largest and the most dominant in the region.”
“Mega projects become magnets for inward investment and also usher in a new lifestyle choice that appeals to a cosmopolitan population. They draw extraordinary attention to the development beyond the residential or commercial components. Any project can have the basic criteria of impressive architecture, excellent planning and great amenities but a mega project will elevate the offering to an exceptional global level,” he added.
An example of a mega project is the Downtown Burj Dubai development by Emaar Properties in the heart of Dubai. With a development value of US$20 billion, Downtown Burj Dubai has all the characteristics of a mega project. At its heart is Burj Dubai, on course to becoming the world’s tallest tower. Another key component is The Dubai Mall, one of the world’s largest shopping and entertainment destinations. Burj Dubai Square is a business hub and there are nine hotels, several residential projects and a Boulevard that will offer several entertainment options.
“Downtown Burj Dubai in fact creates a whole new downtown for Dubai and is poised to become the new centre of the city,” Amirault explained.
Another mega project by Emaar is King Abdullah Economic City in Saudi Arabia, which spreads over 168 million sq m, and is the largest private-sector led project in the region. It has six key components - the Sea Port, Industrial Zone, Central Business District (including the Financial District), Resort District, Educational Zone and Residential Communities. The project is poised to bring in a new era of economic prosperity for the Kingdom.
At the root of these mega projects is the ability to turn huge profit while also providing a value add to the community.
“If developed through adequate planning, a mega project can be very profitable,” admitted Amirault.
“A large project can have tens of thousands of residential units but a mega project such as Downtown Burj Dubai will have all of these units in addition to the tallest tower in the world, one of the world’s largest shopping destinations, and the grandest boulevard wrapped around the largest civic fountain and lake. Arguably each individual residential unit is similar to the other luxury developments in other projects but Downtown Burj Dubai is much more value-packed because of the combination of all elements in one mega project destination,” he said.
“A mega project is drawn out after careful deliberation and there is no room for marketing gimmick there. It is a concerted effort, where sound business plans are formulated, which also take into consideration social parameters. King Abdullah Economic City, for example, has the potential to create one million jobs,” he added.
Amirault was speaking on the panel of a breakout discussion on select Middle East Mega Projects. Moderated by Mohammed Dahmash, partner, Real Estate, Hospitality & Leisure Advisory Service, Ernst & Young, Amirault’s fellow panellists included Mohammed Al Redha, assistant sales manager, Bawadi; John Shaw, chief investment officer, ALDAR Properties; and Mr Izzat Dajani, chief executive, Investment & Development Office, Government of Ras Al Khaimah.